Brexit fallout could hit Irish jobs and finances for decade
The fallout from Brexit could hit jobs, economic growth, and state finances in Ireland for the next 10 years, the ESRI has warned.
British Prime Minister Theresa May’s insistence on full control over the issue of migration may result in a worse jobless rate.
An economic simulation of the economy (by the ESRI and the Department of Finance) shows jobs in exports and imports, such as in the food industry, are not the only ones in the line of fire.
Even the least disruptive outcome for Ireland, in which the British strike the softest of Brexit terms with the EU, would spell bad news for our national finances.
The soft Brexit, or so-called Norway option (because it implies Britain joins Norway in the European Economic Area and stays in the customs union), would mean wages here would be 2.2% lower and unemployment a 1.2 percentage point higher than they would have been, if there was no Brexit.
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Worse, the hard Brexit-line British prime minister, Theresa May’s insistence on full control over migration (signalled at her Tory Party conference in Birmingham last month) would result in a jobless rate two percentage points higher, and the national debt 10 percentage points higher, than they should be.
Under this hard Brexit, or World Trade Organisation option of high tariffs, wages here would be 3.6% lower.
The economy is still growing, but the value of sterling, the research assumes under all scenarios, will be permanently lower, and is unlikely to rise back to 76 pence against the euro, the rate on the eve of the Brexit vote in June.
One of the authors of the simulation, ESRI professor, Edgar Morgenroth, told the Irish Examiner last week that the Government should “bypass” London and seek allies in Europe, because the current British plans run counter to Irish political and economic interests.
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